The decision to start a second career may easily be one of the most life-changing choices you ever make. It's important to take stock of both the costs and benefits of switching careers before you quit your job or make other major decisions. Nevertheless, changing careers may be exactly what you need to boost your finances into the future. If you're unsure of how your decision might affect your finances, you should consult a financial advisor in Edmonton.
How Can Starting a Second Career Affect My Financial Situation?
A Second Career Implies an Investment
No one adopts a second career for free. There is always some degree of cost associated with changing careers. Generally, this means getting education to acquire new skills or knowledge so that you can enter a new field. However, you may also have to relocate to where you can find more jobs in your new sector. These expenses have to be carefully considered before you decide to make major changes.
As with any investment, you hope it yields a positive return over time. How much time you have is a major factor in the second career equation. Generally speaking, the younger you are, the longer you can take advantage of this investment in a second career. As you age, you may not be able to extract as much value out of a career change. If you've already climbed one career ladder, does it make sense to start climbing another?
Switching Industries or Switching Skills?
The greater the change, the more likely you are to need additional skills to adopt another career. However, some careers offer flexibility. Have you considered simply changing industries while still using your existing skill set? For example, if you work in the financial department of an insurance company, you might be able to transfer your financial skills to another industry with minimal effort. Perhaps you don't need another career, but rather a different corporate environment or industry to re-spark your passion.
Can your second career build on the knowledge you have from the first? A financial expert who suddenly wishes to explore UX/UI design could combine those skills and look for job opportunities working on financial apps for banks or stockbrokers. Starting a second career does not mean that you have to completely abandon what you already know well. By leveraging previous knowledge, you can minimize the cost of investing in a second career and maximize the potential return.
Making Your Employment More Stable
One of the best reasons to consider a second career is stability. Some sectors are in decline while others are on the rise. Truck drivers' days are numbered as autonomous vehicles grow more advanced each year. Edmonton's strong oil industry also faces potential cuts as the country shifts towards greener sources of energy. If you're currently employed in industries like these, you may want to consider a second career to have an exit strategy.
A recent survey found that many tourism-related industries are on the rise in Canada. Likewise, semiconductor manufacturing has become a major concern for western nations due to tensions in Taiwan. As a result, the country is seeing major investments in these areas. Switching to a career in these fields could provide stable long-term employment as opposed to worrying about losing your job at a moment's notice.
Short-Term Effects of Starting a New Career
Perhaps the scariest part of a second career is taking that first step towards a new lifestyle. The short-term effects are what scare most people away from taking risks and keep them trapped in the same job until retirement. In the short-term, you may find that your income drops. You cannot reliably expect to go from a mid-tier or high-paying job in your current area of expertise to a similar job in a career where you're a novice.
Furthermore, whether you're looking to start a new business or simply learn new skills, there are expenses associated with those goals. However, it can be done. Jeff Bezos left a very lucrative career working in a hedge fund to start selling books online, a move that seemed unimaginable to Jeff's boss. Consider some of the costs associated with a career change and start crunching your numbers.
Investing in Education
Switching careers or adopting a second career may require you to get more education. You may be able to build on your undergraduate studies with a master's program that suits your second career choice. However, if you're making a radical change, you may have to go back to the drawing board entirely and study from scratch. Consider how much education you'll need and what it'll cost.
You can reduce education costs considerably by studying at public universities in your province. Annual tuition at the renowned University of Alberta, for example, is just under $4,000 for Alberta residents. Students from abroad or from other provinces may pay almost triple that price! So, stay close to home if you need more education. Also, look for online courses that could give you certificates in specific skill areas. Anything you can add to your CV will be helpful.
Indirect Costs of Changing Careers
Changing careers imposes indirect costs in addition to obvious expenses like education or relocating. First, you will likely earn less while you build your new career up. Calculate how much you can expect your salary to decrease, and how long you think it will take to get it back to its current levels. You should also consider other benefits that your current job offers. For instance, consider the value of retirement benefits or stock options that the company offers.
It can be beneficial to review all of these factors with a financial advisor in Edmonton. There may be hidden costs that you haven't considered. An experienced financial advisor can help you
Long-Term Gains From Starting a New Career
We've focused mostly on costs because you need to be able to bear those expenses for several years while you construct a new career. However, if you can remain resilient, there could be substantial financial gains. A second career could have a much higher salary ceiling, allowing you to earn more than you do with your current career. For example, the average manufacturing job pays around $31 per hour, while work in public utilities can pay over $47 per hour!
If you want to start your own business, you may earn much more than you ever could as an employee. However, starting a business comes with additional risks. You may be able to strike a middle ground by starting your business as a second career while still working full-time at your current workplace. When your second career takes off, you can leave the first, minimizing your risk and increasing your potential earnings faster.
Speak to a Financial Advisor in Edmonton
Before making major financial decisions, it's in your best interest to speak to a financial advisor in Edmonton. A person that knows your local economy and job opportunities can advise you on the best way to make a change or adopt a second career.
Contact DeHaan Private Wealth in Edmonton to schedule a meeting with one of our advisors and begin your journey to a better financial future.